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Drive Profitability In Your Organisation with Data and Social Strategies

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A presentation to the MAtes of Melbourne, IT Dees group on how organisations can use their data combined with social media to drive profitability

A presentation to the MAtes of Melbourne, IT Dees group on how organisations can use their data combined with social media to drive profitability

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Drive Profitability In Your Organisation with Data and Social StrategiesDrive Profitability In Your Organisation with Data and Social Strategies Presentation Transcript

  • Drive Profitability In Your Organisation with Data and Social Strategies
    Mates of Melbourne , 15th April 2011
    Phillip Dooley and Fergal Coleman
    Twitter @symphony3think
    www.symphony3.com/MOM
    www.symphony3.com
  • Business Dimensions
    People Needs
    Why We Exist
    (What we offer)
    Financial Sustainability
    How We do It
    (Our Departments or Functions)
    Building Blocks
    (IT, Data, Standards, People etc)
  • Stages of Communication
    People Needs
    Above the line advertising is telling people what they need en mass.
    Below the line activity is individually telling them what they need.
    Smart analysis understands their needs from their behaviour
    Social media is where they proactively tell us what they want. All we have to do is listen.
    Why We Exist
    (What we offer)
  • What does address tell us?
    Map your customers or members and compare them to external datasets
  • What does their address tell us?
  • Birds of a feather flock together
  • An example of a future market - Cemetery
  • What does address tell us?
    We can predict behaviour by address.
    The likelihood of joining a footy club.
    The likelihood of becoming a customer.
    Areas where we should have more customers.
  • We can work out the probability of being a club member
  • 5-9 year olds in house and a club supporter
  • Probability of being a member and spending on a product
  • Auto Sponsor Potential… (example only)
    High density, top 10% car spend, close to Dealer
  • What does behaviour tell us?
    Do you know when and what they spend – loyalty club?
    Do you know when they attend - Turnstile Data
  • Market Penetration
  • 15
    Introduction to RFM
    What is RFM?
    “RFM analysis is a very old and very powerful method of coding existing customers. It is used to predict response, average order size and other factors.”
    • RFM provides a method for determining who is likely to respond, and who is unlikely to respond to a particular offer
  • RFM predicts the return on a direct marketing action
  • 17
    How Does RFM work ?
    R stands for Recency which is the most powerful predictor of customer response.
    People who have just bought from you are much more likely to respond to a new offer than people who brought from you a long time ago.
  • 18
    How Does RFM work ?
    F stands for Frequency. Which has been defined as the number of times that a customer has made a purchase from you.
    Frequent buyers respond better than infrequent buyers.
  • 19
    How Does RFM work ?
    M stands for MonetaryAnalysis
    It involves categorizing all customers by the total amount that they have purchased (per month, year) and sorting all customers by that amount.
  • 20
    Break even per RFM Cell
    This slide highlights the breakeven point for a mail out.
  • RFM principals can tell us:
    Which customers will leave in the future.
    Which customers will buy even without marketing.
    Which customers are becoming more loyal
    Which customers are becoming less loyal
    WE used RFM principals to predict which club members would not renew their membership
    The principals worked backwards but was still highly reliable
  • Likelihood to not renew membership in 12 months time
    Score Identifies At Risk Members
    100%
    80%
    60%
    % that rejoin
    40%
    % that leave
    20%
    0%
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    Member Retention/Churn Segments
  • How do we know it works
    We allocated a score from 1 to 10 to the whole club.
    We kept half of the 1’s as a control group.
    We sent the other half a “Thank you” letter.
    We didn’t sell or ask for any money
    We concentrated on building a sense of community
    We looked at who did not renew 12 months later.
    The renewal rate for the group approximately doubled when compared to the control group.
    WE used similar principals to increase profit from a raffle ticket campaign by 38%
  • Smart analysis understands their needs from their behaviour
    People Needs – Which need does footy meet
    HIGHER ATTENDANCE
    Entertainment and Spectacle
    Ritual and Ceremony
    HIGH CLUB LOYALTY
    Escape Experience
    DON’T CARE WHO WINS
    Personal Identification
    Aesthetic Pleasure
    Cultural Integration
    (A sense of belonging)
  • Smart analysis understands their needs from their behaviour
    People Needs – Which need does footy meet
    HIGHER ATTENDANCE
    Only Attend nominated club
    >3 matches
    Attends own plus
    less other clubs
    Attends more other clubs
    than own club
    DON’T CARE WHO WINS
    Attend Own
    Team 3 or less times
    HIGH CLUB LOYALTY
    Occasionally go anywhere
    No Attendance
  • What can we do with this?:
    We match the product to peoples needs.
    We run focus groups for each segment.
    Not all of our members appreciate a free scarf and beanie.
    A small thank you goes a long way.
    How has it changed the product ?
    Close spectacular games are as important as who plays.
    Big crowds create more big crowds.
    We have a club with no team?
  • Online Community Feedback
  • Revolution
    “Every generation needs a new revolution.”
    Thomas Jefferson
    We are witnessing multiple revolutions right now…
    “Revolution doesn’t happen when society adopts new technology, it happens when society adopts new behaviours “
    Prof. Clay Shirky author “Here Comes Everybody”
  • Expectations of Organisations Are Changing
    “In the past we (local government) told the community what we were doing, we have now evolved to engaging the community in what we propose to do, but the expectation of the community today is that not only will they be engaged but they will directly influence and they will have control over what happens. This is not an unreasonable expectation.”
    John Nevins, CEO, City of Kingston.
  • What is Social Media (and Web 2.0)
    Social media is based on the integrations/conversations between different people online and for organisations to become part of this they need to move from a monologue to a dialogue
    Technology
    is merely the
    conduit for
    people to:
    Create
    Connect
    Collaborate
    React
    Organise
  • Changing Behaviours!
  • Why Engage? The pay back comes quickly
    “Companies using the web intensively gain greater market shares and higher margins”
    - “The Rise of the networked enterprise: Web2.0 finds its payday” – McKinsey Quarterly Dec. 2010
    Some averages from report
    20% decrease in travel costs
    20% improvement in marketing effectiveness
    10% reduction in operational costs
    15% decrease in marketing costs
    18% increase in customer satisfaction
    41% increase in employee satisfaction
  • Revolutions can be scary!
  • No wonder it’s daunting!
  • Think about what people do
    People Creating – Blogs, (blogosphere) user generated content, Podcasts, Youtube, Slideshare.net, Docstoc.
    People Connecting – Facebook, Linkedin, Twitter, Myspace, Bebo, Orkut, hi5, Secondlife, Foursquare.
    People Collaborating – Wikis (wikipedia), Intelpedia (internal use), Bearing Point (Mike2.0), Salesforce chatter, Centraldesktop, Sharepoint.
    People Reacting – Forums, discussion boards, ratings, reviews.
    People Organising – tags, Digg, De.licio.us.
    Accelerating Consumption – RSS, Widgets.
    Forrester
  • The Social Technographics Ladder
    Groups include people participating in at least one of the activities monthly except Conversationalists who participate in at least one of the included activities at least weekly.
    Inactives neither create nor consume social content of any kind
  • 7 people = 350,000,000
    Picked seven bloggers to attend a top secret “Midnight Webcast”
    They told tens of thousands of fans
    Mainstream media listened and reported
    Estimated 350 million people heard the news within 24 hours
    Is this the future? 2008
    Who are the influencers in your industry?
  • What are your Objectives
    1. Listening – Use social media to better research community and customer needs.
    2. Talking – Use social media to spread messages about your organisation.
    3. Energising – get your most enthusiastic customers to become advocates , using social media to increase word of mouth.
    4. Supporting – Support customers or help them to support each other.
    5. Embracing – Integrate your customers into the way your organisation works
  • Case Study: Kingston City Council
    “In the past we (local government) told the community what we were doing, we have now evolved to engaging the community in what we propose to do, but the expectation of the community today is that not only will they be engaged but they will directly influence and they will have control over what happens. This is not an unreasonable expectation.”
    John Nevins, CEO, City of Kingston.
  • Getting Started? What do you need
    Leadership commitment and vision“Social Media in everything we do”
    Open up to new technologies and to change behaviours
    Commitment to loss of control
    Get Started!
    Have a Strategy/Framework
  • Social Media Framework Logical Boxes
    People Needs
    Who are you Serving? Where are they?
    What Drives them to Engage with you?
    Residents
    Local Business
    Employees
    Residents
    Local Businesses
    Employees
    Why We Exist
    Mission
    Vision
    Core Values
    Strategic Goals
    Financial Sustainability
    Improved Customer Service – more support at no additional cost
    More Efficient Processes
    Lower Costs
    How We do It
    Communicate
    Make (Services delivered)
    Listening
    Talking (Informing)
    Supporting
    Supporting Activities
    Energising/engaging
    Building Blocks
    Technology (Tools)
    Finance (Budget)
    People (internal)
    Leadership
    Culture
    Skills +Training
    Standards &
    Policies
    Social Media Policy
    Response Guide
    Risk Mgmt
    43
    Data and Information
  • Coming soon or in prototype…
    LinkedIN
    CEO Blog
    Ning
    Policy
    Response Guide
    Mayoral Blog
    YouTube/Video
    Skype/Ipads/Iphones
    Twitter
    Wikis
    Yammer
    Department specific - strategies
    Training, awareness and more training!
  • Facebook
    • Timely updates (e.g. floods, festival)
    • Community feedback and engagement
    • Interactive content
  • Community Consultation Online
    www.haveyoursayday.com.au
  • Next Step: www.Communityeffect.net
    Community Fully Engaged and Participating
  • Conclusion
    Social Media is…..
    Strategic use of Facebook and Twitter and a whole lot more
    A technology-enabled conversation with the whole community
    An enabler:
    It will allow you to reach your community much more effectively
    Embrace it strategically
    Integrate it into your day to day operations
    Get Engaged!
  • Your thoughts or questions??
    What are your experiences?
    Questions?
    www.symphony3.com/MOM
    Facebook.com/symphony3
    Twitter @symphony3think